We have had two cases recently where it took HMRC six months to process deregistrations, and we were told a couple of weeks ago that they were working on a 120 working day turnaround for option to tax queries (not helpful when you are trying to sell a property!). Good luck getting a response!
....and, if turnover increases (ie the business is sufficiently successful), don't forget about VAT (the queried receipts are not 'disbursements').
I would still be wary about whether this really is 'self-employment', but, as other respondents have said, that is a problem for the 'employer' (since IR35 not in point).
Quite possible that the 'care services' business is not VAT registered due to providing exempt services, so VAT possiby not recoverable at all, irrespective of the 6-month rule!
...to take into account would be the extent to which profits would be withdrawn -vs- retained. If those involved have a lifestyle that precludes building up reserves, then incorporation may well increase tax, especially if you can't justify a big figure for goodwill on the way in - overdrawing loan accounts may be an option in some cases, but that carries its own issues!
My answers
We have had two cases recently where it took HMRC six months to process deregistrations, and we were told a couple of weeks ago that they were working on a 120 working day turnaround for option to tax queries (not helpful when you are trying to sell a property!). Good luck getting a response!
....and, if turnover increases (ie the business is sufficiently successful), don't forget about VAT (the queried receipts are not 'disbursements').
I would still be wary about whether this really is 'self-employment', but, as other respondents have said, that is a problem for the 'employer' (since IR35 not in point).
VAT
Quite possible that the 'care services' business is not VAT registered due to providing exempt services, so VAT possiby not recoverable at all, irrespective of the 6-month rule!
another factor...
...to take into account would be the extent to which profits would be withdrawn -vs- retained. If those involved have a lifestyle that precludes building up reserves, then incorporation may well increase tax, especially if you can't justify a big figure for goodwill on the way in - overdrawing loan accounts may be an option in some cases, but that carries its own issues!